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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 18, 2005
California Pizza Kitchen, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-31149 95-4040623
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6053 West Century Boulevard, 11th Floor 90045-6438
Los Angeles, California (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (310) 342-5000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Section 2 - Financial Information
Item 2.02 Results of Operations and Financial Condition.
On March 18, 2005, California Pizza Kitchen, Inc. (the "Company") issued a press
release announcing expected adjustments to previously issued financial
statements as discussed under Item 4.02 below. The press release is attached as
Exhibit 99.1.
Section 4 - Matters Related to Accountants and Financial Statements
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) On March 18, 2005 the Company's management and the Audit Committee of the
Board of Directors determined that the Company's accounting for tenant
improvements and rent holidays was not in conformity with generally accepted
accounting principles as described by the Securities and Exchange Commission
(the "SEC") on February 7, 2005 in a letter to the American Institute of
Certified Public Accountants. As a result of this pronouncement by the SEC,
management and the Audit Committee, in consultation with Ernst & Young LLP, the
Company's independent registered public accounting firm, have concluded that the
Company's previously issued consolidated financial statements presented in its
Annual Report on Form 10-K for the fiscal years ended December 28, 2003,
December 29, 2002, December 30, 2001, and December 31, 2000, and those in its
Quarterly Reports on Form 10-Q filed during 2003 and 2004, should no longer be
relied upon. Consequently, the related reports of Independent Registered Public
Accounting Firm should no longer be relied upon, nor should the unaudited
financial results included in the Company's press release issued on February 3,
2005.
In prior periods, the Company had recognized rent expense for operating leases
using a lease term that commenced when actual rent under the lease term began,
which generally coincided with a point in time near the date the restaurants
opened. This generally had the effect of excluding the build-out period of the
Company's restaurants (which typically preceded the commencement of the lease
term) from the calculation of the period over which rent was expensed. As a
result of the SEC's pronouncement in the February 7, 2005 letter, the Company
will now recognize rent expense over a lease term that includes the build-out
period, which in most cases will cause rent expense to be recognized sooner than
previously reported. Further, in prior periods, the Company's consolidated
balance sheets reflected the unamortized portion of construction allowances
funded by landlords as a reduction of the related leasehold improvements. In
keeping with the SEC's February 7, 2005 pronouncement, construction allowances
will now be recognized as deferred rent and amortized over the lease term as a
reduction of rent expense. Fiscal years ending 2002 and 2003 included charges of
$2.4 million and $14.7 million respectively, for the impairment of property and
equipment under Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment of Disposal of Long-Lived Assets." The restatement will
increase the impairment charge previously included in the fiscal 2002 and 2003
results of operations. Subsequent years, however, will reflect a reduction in
rental expense and therefore an increase in earnings per share that corresponds
with the impaired assets' lease terms. In addition, the Company's statements of
cash flows reflected construction allowances as a reduction of capital
expenditures within cash flows from investing activities, but these construction
allowances will now be reflected as cash flows from operating activities.
Section 8 - Other Events
Item 8.01 Other Events.
On March 18, 2005, the Company announced that it would file a Form 12b-25 for a
15-day extension of the March 18, 2005 filing deadline for its Annual Report on
Form 10-K for the fiscal year ended January 2, 2005. The Company is working
diligently to complete its review of the matters discussed in Item 4.02 above
and to quantify the impact of the necessary adjustments on each of the affected
prior periods. The Company's Form 10-K for the fiscal year ended January 2, 2005
will include disclosure of the effects of the required adjustments on its
audited financial statements for each period presented in the Form 10-K. The
Company now expects to file its Form 10-K on or before April 4, 2005.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit Description
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99.1 Press Release, dated March 18, 2005, entitled "California Pizza
Kitchen Announces Lease Accounting Corrections and Delay of Annual
Report Filing; Company Expects to File Form 10-K on or before
April 4, 2005."
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
March 18, 2005 California Pizza Kitchen, Inc.
a Delaware corporation
By: /s/ Larry S. Flax
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Larry S. Flax
Co-Chief Executive Officer,
Co-President and Co-Chairman
of the Board
By: /s/ Richard L. Rosenfield
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Richard L. Rosenfield
Co-Chief Executive Officer,
Co-President and Co-Chairman
of the Board
EXHIBIT INDEX
Exhibit Description
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99.1 Press Release, dated March 18, 2005, entitled "California Pizza
Kitchen Announces Lease Accounting Corrections and Delay of Annual
Report Filing; Company Expects to File Form 10-K on or before
April 4, 2005."